Cost of midwife cover an obstacle to homebirth service

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Adam Cresswell, Health editor | March 05, 2009 Article from: The Australian

SUBSIDISING indemnity payments for midwives could cost taxpayers an estimated $12 million to $24 million annually if the federal Government were to treat them as favourably as specialist obstetricians.

Insurance experts warned yesterday that despite public perceptions that mothers who delivered their babies with a midwife faced fewer risks, premiums to insure midwives against bad outcomes were likely to be similar to those faced by obstetricians -- who can pay from $60,000 to $100,000 a year for their policies ... Midwifery advocates are warning that without government intervention on indemnity, private midwives and hundreds of homebirths each year will be driven underground because practising uninsured will no longer be legal from mid-2010.

[The Maternity Weervices Review] ... fell short of recommending indemnity subsidies to cover midwife-led homebirths ...

... Dr Nisselle said that if a midwife performed 100 deliveries a year and charged $2000 each, earning $200,000, a $45,000 premium would exceed the 7.5 per cent threshold by $30,000.

If midwives were granted the same deal as obstetricians, the subsidy would amount to $24,000 per midwife.

Official estimates have suggested between 500 and 1000 midwives would be needed to take pressure off existing birthing services, creating a potential subsidy cost of up to $24 million.

No commercial insurer has offered cover to private midwives since the medical indemnity crisis of 2002-03. Dr Nisselle said medical insurers might be reluctant to fill the void for fear of alienating their own members, many of whom are at best cautious about independent midwifery.

Barbara Vernon, executive officer of the Australian College of Midwives, said the problem needed addressing but the Government had a range of other options, such as capping midwives' liability, and providing cover itself, as the Northern Territory Government had already done.

Midwives generally birth no more than 40 babies a year. That equates to 4 births a month, with 2 months "off". I put that in inverted commas because babies come when they're ready, some early, some late. So in planning to have 2 months off, you actually get about 3-4 weeks off.

We also do not charge $2000. In Sydney, midwives charge $4000 - $5000. This fee includes all antenatal, birth and postnatal care. So a midwife might make $180,000 if she was fully booked. On that sort of income, a $45,000 premium would cost the midwife $20,000, assuming she had access to the PSS. Tax on $180,000 would be $61,000, so the midwife would end up with $180,000 - $61,000 - $20,000 = $99,000. But, many midwives do not book 40 women each year - some book only 10 - 20 women a year. For these midwives the cost of indemnity would be prohibitive, and a cost that they would definitely need to pass onto the consumer.

Melissa Maimann, Essential Birth Consulting.